* Investors focus on reflation trade but uncertainties
* Palladium touches highest since Jan. 25
* Speculators raise net long position in gold in week to
(Updates prices; adds comment, second byline, NEW YORK
By Marcy Nicholson and Pratima Desai
NEW YORK/LONDON, Feb 13 Gold prices slipped on
Monday as the dollar rose and equities climbed, but political
and economic uncertainties in the United States and Europe are
expected to provide support for now.
The spot price was down 0.7 percent at $1,225.71 an
ounce by 2:51 p.m. EST (1951 GMT), falling further below last
week's three-month high of $1,244.67. U.S. gold futures
settled down 0.8 percent at $1,225.80.
The dollar hit a two-week high against the yen as
investors focused again on the U.S. reflation trade which
dominated in the aftermath of Donald Trump's election as U.S.
President in November, but has stalled this year.
A higher U.S. currency makes dollar-denominated commodities
more expensive for holders of other currencies, potentially
A gauge of global equity markets advanced
and bond yields rose.
In Europe, national elections this year starting with the
Netherlands at the end of March make for an uncertain political
The first round of the presidential elections in France
follows in April, with the possibility of a victory for Marine
Le Pen of the National Front arousing much uncertainty.
"Support for gold because of politics will hold this side of
the French election," said Danske Bank analyst Jens Pederson.
"Le Pen's comments on euro membership are very much on the
Le Pen has rattled investors by promising to take France out
of the euro zone and to hold a referendum on EU membership.
"Global uncertainty from the U.S., Europe and on the Korean
front will drive global prices high again," said Geofin Comtrade
Ltd's head of research, Hareesh V.
North Korea said on Monday it had successfully test-fired a
new type of medium-to-long-range ballistic missile the previous
day, claiming advances in a weapons program it is pursuing in
violation of U.N. resolutions.
"Against soft physical demand for gold, the market remains
fixated upon the U.S., for now," Standard Chartered Global
Research said in a note.
"Our economists believe a March (U.S. interest) rate hike is
unlikely and they do not think the Fed is in a rush to hike
Strong demand for gold can be seen on COMEX, where
speculators raised their bullish gold bets to a two-month high,
U.S. government data showed on Friday.
Meanwhile silver eased 0.7 percent to $17.83 per
ounce, while platinum lost 1.2 percent to $998.50 per
Palladium was down 1.4 percent at $773.25 per ounce,
after reaching the highest since Jan. 25 at $786.90.
(Additional reporting by Arpan Varghese and Nallur Sethuraman
in Bengaluru; Editing by Ruth Pitchford and James Dalgleish)